The technical charts indicate a temporary low has been made at 105.55, but bullish revival is seen only above the descending trendline.

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Bullish scenario - Powell sees the need to hike rates three more times this year

The USD/JPY will likely see a convincing move above 108.00 (trendline resistance), confirming a bearish-to-bullish trend change and could test supply around 108.54 (38.2 percent Fib R of 113.39-105.55) and 109.00.

However, the pickup in the treasury yields (10-yr above 3 percent) may not bode well for the equities, hence, the uptick in the USD/JPY will likely be short-lived.

Equity markets have already factored-in this scenario, suggests the 400 point rally in Dow yesterday. However, currencies and bond markets have seen little action over the 24 hours. So there is plenty downside scope in USD/JPY if "tone of Powell's speech is cautious and he believes inflation or productivity is low".

A downside break of the symmetrical triangle seen on the 4-hour chart would open doors for a re-test of the recent low of 105.55.